The SEC’s Office of Compliance Inspections and Examinations (OCIE), in coordination with the Division of Investment Management and the Asset Management Unit of the Enforcement Division, recently issued a Risk Alert summarizing the due diligence procedures that certain investment advisers employ when considering hedge funds and other alternative investments for their clients.  This article summarizes the key findings of the Risk Alert.  See also “Legal and Operational Due Diligence Best Practices for Hedge Fund Investors,” Hedge Fund Law Report, Vol. 5, No. 1 (Jan. 5, 2012).